Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Louise F. Rogers, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Amendment to the Agreement with Harmony Healthcare, LLC to Provide Coding Services
RECOMMENDATION:
title
Adopt a resolution authorizing an amendment to the agreement with Harmony Healthcare, LLC to add additional coding services and increase the amount of the agreement by $2,750,000, to an amount not to exceed $4,000,000.
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BACKGROUND:
San Mateo Medical Center’s (SMMC) medical coding employees have been handling inpatient, outpatient surgery, observation, lab, and radiology services. SMMC has been utilizing contracted coding services to cover areas not covered by these coding employees and regulate the fluctuation of coding services needed to prevent backlog of accounts. In June 2021, SMMC completed a Request for Proposals for coding services and Harmony Healthcare, LLC (Harmony) was chosen based on their experience in the industry and competitive pricing, in comparison to the proposals that were submitted. On October 5, 2021, Harmony and the County entered into an agreement for coding services for the term of November 1, 2021 through October 31, 2026, in an amount not to exceed $1,250,000. On February 14, 2023, the County also entered into an agreement with CorroHealth, Inc. (CorroHealth) for coding services for the term of March 1, 2023, through February 28, 2026, in an amount not to exceed $4,500,000.
DISCUSSION:
With the Epic implementation phase currently in progress, SMMC has recently discovered CorroHealth’s inability to continue to provide financial reporting functionalities and their incompatibility between CorroHealth’s AI-driven coding process and Epic, when Epic goes live. Harmony has agreed to assume the coding service responsibilities currently being provided by CorroHealth. In order to cover the cost of providing the latter services, SMMC is requesting this Board approve increasing the amount of the agreement with Harmony by $2,750,000, to an amount not to exceed $4,000,000.
County Attorney has reviewed and approved the resolution and amendment as to form.
The resolution contains the County’s standard provisions allowing amendment of the County fiscal obligations by a maximum of $25,000 (in aggregate).
It is anticipated that Harmony will perform at an accuracy rate of 95% or higher when providing coding services.
PERFORMANCE MEASURE:
|
Measure |
FY 2023-24 Actual |
FY 2024-25 Estimated |
|
Accuracy rate that Harmony performs at when providing coding services |
≥ 95% |
≥ 95% |
EQUITY IMPACT:
Harmony’s continued coding services will positively impact equitable health outcomes because delivery of coding services at SMMC, a public safety net hospital, addresses community need. SMMC’s patients span a wide spectrum of races, ethnicities, gender, and gender-identities. Within the past 18 months, the largest cohorts of specialty care patients at SMMC were female (56%), Hispanic or Latino (58%), and primarily Spanish speaking (55%).
FISCAL IMPACT:
The term of the amended agreement is March 1, 2023, through February 28, 2026. The amendment increases the amount payable under the agreement by $2,750,000 to and amount not to exceed $4,000,000 for the 5-year term. Funds in the amount of $1,833,333 are included in the SMMC FY 2024-25 Adopted Budget. Funds in the amount of $916,667 are included in the SMMC FY 2025-26 Recommended Budget. Similar arrangements will be made for future years.
Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care is covered by the County’s General Fund contribution to SMMC and is within the existing annual appropriation.